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Jackson Hole Economic Symposium

Happy Friday!

Jerome Powell spoke to economists, market participants, and government representatives this morning at the annual Jackson Hole Economic Symposium. Historically, the annual conference has been used by Fed chairs to make important announcements regarding the future direction of monetary policy.

Mr. Powell’s remarks this morning seemed to be in line with what investors had expected. Mr. Powell stated, “I was of the view, as were most participants, that if the economy evolved broadly as anticipated, it could be appropriate to start reducing the pace (of asset purchases) this year.” Mr. Powell also reiterated the FOMC’s view that inflation will be transitory and monitoring incoming data from the labor market will be key.

As we continue to recover from the pandemic induced recession, monitoring the tapering of asset purchases is important for several reasons:

1) Asset tapering by the Federal Reserve usually precedes any potential interest rate hikes.

2) Tapering of certain assets can give investors insights to the state of different markets. For example, if the Fed pulls back on its MBS purchases, that could indicate a strong housing market.  

Mr. Powell also referenced monetary policy from the 1950’s to 1980’s, a time in which inflation was indeed transitory. However, policy makers acted too soon raising rates, causing more harm than good.

In summation, Mr. Powell indicated that he is comfortable with the Fed’s current policy stance and his team will be ready to adjust as necessary.

This commentary reflects the personal opinions, viewpoints and analyses of the Hamilton Capital Partners, LLC, a registered investment advisor, employees providing such comments, and should not be regarded as a description of advisory services provided by Hamilton Capital Partners, LLC or performance returns of any Hamilton Capital Partners, LLC client. The views reflected in the commentary are subject to change at any time without notice. Nothing in this commentary constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Hamilton Capital Partners, LLC manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results. Hamilton Capital Partners, LLC provides links for your convenience to websites produced by other providers of industry related material. Accessing websites through links directs you away from our website. Users who gain access to third party websites may be subject to the copyright and other restrictions on use imposed by those providers and assume responsibility and risk from use of those websites.
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